Ramsdens has agreed to be acquired by US pawnbroking rival FirstCash for £206 million, a deal that will take the British firm off the Alternative Investment Market (AIM) nearly a decade after its listing.
Shareholders in Ramsdens will receive up to 609p per share under the offer, representing a 35% premium to its latest closing price. The deal values the company's entire share capital at approximately £206 million, including dividend payments.
Expansion in the UK Market
FirstCash, an international pawnbroking operator with around 3,300 sites across the US, South America, and the UK, is listed on the US Nasdaq stock exchange. It stated that acquiring Ramsdens' 174 stores will bolster its presence in the UK, particularly in northern England and Scotland, where Ramsdens has a stronger footprint.
The acquisition will give FirstCash access to Ramsdens' pawnbroking business, where customers take out loans against jewellery or watches, as well as its precious metals buying service, jewellery retail, and foreign exchange operations.
Gold Price Boost
Ramsdens, headquartered in Stockton-on-Tees, County Durham, has benefited from the rising price of gold this year. A significant spike occurred in early March amid escalating conflict in the Middle East, pushing gold to around $5,400 (approximately £4,081) per ounce. According to Ramsdens, higher gold prices encourage more customers to sell unwanted jewellery, which the company then sells for a profit.
However, the volatility of gold prices could weaken future performance, making the acquisition a prudent safety measure for shareholders, the company said.
Cost Savings and Leadership Comments
FirstCash indicated that cost savings could be achieved by merging certain head office and administrative functions.
Peter Kenyon, Chief Executive of Ramsdens, stated: "I am exceptionally proud of the group’s transformational growth since our Initial Public Offering (IPO) on AIM in February 2017. Less than a decade on, we have added 50 Ramsdens stores to the UK high street, created over 300 jobs and significantly grown our profit-before-tax. I remain highly confident that there are significant opportunities for further growth over the coming years."
Following the announcement, Ramsdens' share price surged by approximately 30%.
